With Pakistan's economy in the doldrums and amid demands from the International Monetary Fund (IMF) to reverse Former Prime Minister Imran Khan's relief package, Finance Minister Miftah Ismail on Friday reached Washington for talks with the financial institution.
This comes at a time when the finance minister on Wednesday said that IMF wants the country to revoke the subsidies extended by the Imran Khan government by increasing fuel prices and power tariffs, to revive its Extended Fund Facility (EFF).
The talks will continue until April 24. A Source privy to the information said, "Suggestion pertaining to next budget will also come under discussion during the talks as IMF has already demanded an increased tax target for the next fiscal year," ARY NEWS reported.
"The IMF wants Pakistan to set tax target at Rs7000 billion," the source added.
Noting that the fund had set a series of prior conditions involving steep fiscal adjustment close to Pakistani rupees 1.3 trillion, the finance minister before leaving said that the IMF wants fuel prices raised to breakeven and taxes restored, an amnesty scheme discontinued for industries, circular debt reduced, power rates increased and fiscal savings ensured in order to completely reverse the February 28 relief package extended by the previous government.
However, Ismail said that the government has not made any commitment to the IMF yet, adding that Prime Minister Shehbaz Sharif has advised him to pass on the minimum possible burden to the people.
"We will not pass it on as suggested but something would have to be done because the IMF programme is inevitable," the media outlet quoted him as saying.
The finance minister accused Former Prime Minister Imran Khan of a totally "ill-advised and illogical" package that was not based on the finance ministry's summary.
He added that Khan approved PKR 67 billion fuel subsidy for April which had no prior approval while PKR 96 billion subsidy was now estimated each for the next two months as per litre subsidy on diesel had increased to PKR 51.52.
Notably, the previous government had a commitment to have a primary balance of PKR 25 billion which was now in deficit at PKR 1.3 trillion.
( With inputs from ANI )
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